The California Corporations Code carefully defines the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170). For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation (See Section 15 as to the meaning of “shall”) only on corporations organized under the General Corporation Law or subject to it pursuant to Section 102(a). Thus, Section 1500 is not applicable to, among other business entities, domestic corporations, foreign corporations or foreign associations.

Section 800 of the Corporations Code governs derivative suits. Unlike Section 1500, the legislature has not limited its application to just corporations. Rather, the statute applies to domestic corporations and foreign corporations. The legislature didn’t stop there, it went on to provide that in Section 800, the term “corporation” includes an unincorporated association. Thus, the legislature has chosen to override the general principle that derivative suits are governed by the law of the state of incorporation.